Your Right to Know

WASHINGTON — The postmaster general yesterday renewed his plea for lawmakers to let the
financially troubled Postal Service switch to a five-day delivery schedule for first-class mail and
implement other overhauls needed to modify its outdated business model.

The Postal Service this year pulled the plug on a plan to end delivery of first-class mail on
Saturdays, bowing to pressure from lawmakers and industry groups to maintain a six-day
schedule.

“The Postal Service continues to face systemic financial challenges because it has a business
model that does not allow it to adapt to changes in the marketplace, and it does not have the legal
authority to make the fundamental changes that are necessary to achieve long-term financial
stability,” Postmaster General Patrick Donahoe told the House Oversight and Government Reform
Committee.

The Postal Service’s financial troubles largely stem from a 2006 congressional mandate that it
prefund up to 75 years of its future retirees’ health-care costs, and dwindling revenue as more
Americans use the Internet and email to communicate rather than buy stamps.

The mail carrier lost $16 billion last year.

Donahoe wants lawmakers to eliminate the retiree-prefunding requirement and allow the Postal
Service to control its own health-care system.The agency expects to default on its next $5.6
billion payment to the Treasury for the future retirees’ health-care fund; it is due in
September.

The semi-independent government agency relies on sales of stamps and other products rather than
taxpayer dollars to fund its operations. Revenue from first-class mail, its most-profitable
service, decreased by $198 million in the second quarter of fiscal year 2013.

“We cannot pretend these marketplace changes aren’t happening, or that they don’t require us to
make fundamental changes to our business model,” Donahoe said. “We need legislation that, together
with our planned changes, confidently enables at least $20 billion in savings by 2016. If not, we
go over the edge.”

The Postal Service’s pleas for flexibility have gained little traction with Congress, which
several times has refused to pass legislation allowing the service to modify its operations.

“Ultimately, we’ve kicked the can down the road, first in 2006 by not doing enough, and every
year since,” said Oversight Committee Chairman Darrell Issa of California, a supporter of a
five-day mail-delivery schedule.

“We in the House, we in the Senate, must get together, and we must do it this year,” Issa said
of a Postal Service overhaul.

But the Postal Service still faces a Congress that remains gridlocked on reform and preoccupied
with other legislative priorities.

Yesterday, Rep. Elijah Cummings of Maryland, the top Democrat on the oversight committee,
questioned Issa’s push for five-day delivery.

Instead, Cummings has introduced a bill that would create a position for a chief innovation
officer to develop more-competitive products for the Postal Service. It also would permit the
Postal Service to provide non-postal services, such as check-cashing, warehousing and logistics and
public Internet access as alternative ways to raise revenue. The bill also would delay the next
payment into the health-care prefund until 2017.